Common Concepts to Know Before Buying Crypto

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Common Concepts to Know Before Buying Crypto

9 cards

The valuation of cryptocurrencies is bound by the universal law of supply and demand, as well as macroeconomic conditions.  
However, crypto shows high volatility. As such it calls for understanding of a few common concepts.

A portfolio with different cryptocurrencies can hedge risk and limit exposure to any one type. This is called diversification.

The market sentiment shows the current demand for a cryptocurrency.

Usually, when demand is low, prices decrease, and it is said we’re in a bear market. On the other hand, when prices increase, the bull market is in.

Analyzing the fundamentals of a cryptocurrency can give buyers an understanding of how the project works, what problems it tries to solve, and who the individuals behind it are.

Timing the market is often associated with technical trading and years of experience.

Buying equal amounts at set intervals of timeis one way to get the average price. This is called "dollar-cost averaging”.

Which term means spreading a portfolio across different assets?

“The future of money is digital currency."

Jack Dorsey

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